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This post is Part II in a series exploring reasons to support universal health care. You can find the other parts of the series here. Number crunchers consider this:
Few individuals and organizations benefit under the current healthcare system except certain CEOs. I am not going to touch the issue of executive compensation; however, per capita costs have risen faster than the rate of inflation, leaving more families behind. While there is a moral imperative to care for the well-being of others, increasing access to healthcare can not be considered without a consideration for the economic impact of a change. The major objection is that universal healthcare will simultaneously decrease efficiency and choice while increasing costs. Universal coverage does not mean writing a blank check to every American. Rather, creating an umbrella of health coverage rather than a patchwork quilt takes advantage of economies of scale for purchasing and well as facilitating the development and implementation of best practices from a central authority. The economic savings emerge in other areas of society as well. A healthier population is economically more productive because they are fewer days missed due to illness. Small business is likely to flourish because business owners do not have to fear covering employee health care costs. Increasing efficiency through technology, making prevention and health promotion a central focus of health care, and encouraging behavior change will also help to cut costs. As private industry has had a horrible track record of policing itself, universal health care is the most viable alternative for addressing the dual problems of gaps in coverage and escalating costs. photo by stenbough
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12 RESPONSES TO "THE ECONOMIC ARGUMENT FOR UNIVERSAL HEALTHCARE"
This has all been debated on BC before. Those of us against it realize that taxes increase almost 200%+ for sales tax. Here in PA shooting from 6% to 15% or more.
The argument that no one touches is not the cases for UHC but in favor of a more restricted and controlled health insurance coverage from insurance companies.
Small businesses don't launch or fail because of failure to cover employees. There are always people willing to work in small business. That is a poor argument. Besides, that person may have a lot harder a time launching a business with a lower income due to the raised taxes.
This is such a dumb argument when you see a lot of UHC countries trying to move more towards privatization. Add in the horror stories under UHC and the fact that our government has a hard enough time making anything else work efficiently, why would you want to give them more control in your life!?
@Vanessa -
Your article is well-thought-out and highlights meaningful statistics and failures of the current system.
However I'm sure you could guess I have some questions and major objections. Again, I think we are talking about ends and means. I don’t disagree the current system does not work, but we differ greatly on the means to improve it.
You say, "Universal coverage does not mean writing a blank check to every American. Rather, creating an umbrella of health coverage rather than a patchwork quilt takes advantage of economies of scale for purchasing and well as facilitating the development and implementation of best practices from a central authority."
My fear of UHC does not stem around costs specifically or that blank checks will be handed out. Poor performance aside, I do fear that UHC opens the door for further socialization.
Regarding economies of scale, how do we go about purchasing clothing, food, shelter? Does Target require government intervention to take advantage of economies of scale? Does the automobile industry require only a central authority to ensure safety standards? Other than government housing projects, do developers require the government to tell them when, where and what to build? No, that is taken care of by consumer demand.
The concept of umbrella coverage guided and guarded by a central authority is the same as any other socialized program, such as social security. Would you agree? Many people feel SS is a moral imperative, to take care of retirees who haven’t provided for themselves. However, the system is well on its way to bankruptcy, not through the fault of individuals or private organizations, but because of our government stealing from itself. If that doesn't constitute fraud on the scale of Enron, Arthur Andersen, and MCI, I don't know what else does.
If we are going to fault corporations for fraud, then I think we need to consider government pilfering of SS trust fund in order to fund a budget deficit among the highest type of fraud. Why is it the government can get away with that, but no one seems to mind? Furthermore, where is the security in that? How will the government guarantee the same will not happen to the funding of UHC, which will be collected and allocated through the same mechanism as SS? What safeguards are in place to ensure the funds are used correctly?
Though some may fault the Republican administration, deficit spending to spur the economy is an aberration of the historical Republican position and an idea championed by John Maynard Keynes, who introduced most of today’s Liberal/Democratic economic thought.
You have provided an economic argument for UHC which I think most closely resembles the type of programs such as Roosevelt’s New Deal or Johnson’s Great Society, such ideas espoused by John Maynard Keynes and his followers. Such economics that have been disproved logically and philosophically by many trustworthy scholars since Keynes and his proponents. Furthermore, Keynes himself wasn’t the interventionist his supporters imagine. Even he didn’t believe in long-term intervention, but short-term infusions to guide the economy.
"The argument that no one touches is not the cases for UHC but in favor of a more restricted and controlled health insurance coverage from insurance companies."
The reason that no one touches it is that it is a dumb argument. Uninsured people cost SIGNIFICANTLY more in terms of health care costs. Restrictions in coverage make the problem worse rather than better.
"Small businesses don’t launch or fail because of failure to cover employees. There are always people willing to work in small business."
I didn't say there was no willing to work in small business. I said that there would be more in a system that didn't require employers to pay $.35 of every dollar they make for employee health care. Why don't you ask someone who is self-employed or working at a startup if they have health insurance? If they don't, I bet it is because they can not afford it.
"This is such a dumb argument when you see a lot of UHC countries trying to move more towards privatization."
Notice that they are not actually restricting access to care but allow private companies to offer supplemental coverage.
@Milena Regarding economies of scale, industry does have the capability to do so as well. I have no problem if Ford decides to buy a radiator cap that costs less this year as long as it works well.
In this situation though when you are speaking of health, which should not be viewed as commodity but rather a right, the government would be the actor that is moving goods and services.
Viewing health care as a market is a horrible model when you think what a market failure means. Private industry looks after its own interests: profits. Individuals and businesses that are the best at making profits are the ones that thrive and control the majority of goods and services. If the consumer does not like a particular business, they move on and find another that meets their needs. People can't move on to just find another health providers or find another medication. There are limited options and only a few players that control goods and services.
Pilfering the SS fund is fraud. However, the impending bankruptcy of the fun is also due to lack of individual financial literacy. Health care is something that continually uses funds from the entire population rather than a section. The immediacy of need for spending the funds is a deterrent to using the funds for other purposes.
I'm by no means adept at economic history so I can't speak your comment about that. I do think that having universal health care is not about the government controlling the economy. It's an appropriate and necessary move to protect the most fundamental infrastructure of the economy: the people.
The uninsured typically wait until there's a dire emergency before seeking treatment. If preventative care was the focus, people would be healthier and be able to seek treatment sooner for conditions before they became life threatening.
RE: costs Some HMO policies also raise the cost of health care. For those that still seek referrals every time you need specialist, a study a while back showed that that SOP actually raised costs. When patients are allowed to decide who to see, overall there are fewer visits.
>> socialist alert<<
Re: controlling costs.
If Germany's health care plan is still set up the way it was 10 years ago when I studied it in a health care management class. I'd be a fan of that system in terms of cost control. Each year a gov't budget of X was set aside for health care. Doctors billed as much and as often as they wanted. But a points system was created for reimbursement by the government. More expensive treatments were worth more points.
You would say just bill lots of the pricier treatments to make more money. But the catch is that there's a set amount of money to pay everyone. The more doctors bill, the more the value of those points decline. If 1 billion points are billed in a quarter and you billed 1 million of them you'd get paid according to the pro-rated point value that quarter.
You can adjust the amount of money available in the pool every year to address inflation. Doctors aren't getting rich anymore on health insurance payouts, so the guarantee of steady income might sway physician support.
The AMA is in support of universal
health care of some sort.
I have not spent years of my life developing the nuances taht would be required for such a program, so I DON"T KNOW is probably the answer to a lot questions you'd like to throw at me. I'm simply noting that I like Germany's system -- which also allowed for a lot of choice on the part of the citizen. Citizens were able to opt into any insurance plan available in the country, from one offered by the gov't to the one BMW offers its employers. (I don't remember what the overhead was for employers under this system, given that non-employees might take advantage of their employee health benefits; I'll do some digging if I have time.)
@Milena- Social security is a bust. That's not because every socialized system is inherently flawed and therefore doomed to failure. SS was poorly managed. There are many fine examples of socialism improving the lives of nations that don't get any attention. The media and the government have consistently and successfully labeled all things socialism as Stalinism.
Of course deficit spending isn't in line with Libertarian philosophy- but name a Republican President in recent memory who has done a single thing to cut back the defense budget, which gets more absurd every year.
If we're willing to spend so much money on having permanent military bases on every continent, then I have a hard time understanding why people are so adamantly opposed to spending a similar amount of money on healthcare. They both cost the taxpayers a great deal. But only one of them makes sense from a logical, humanitarian standpoint.
@All - I think we all disagree on some fundamentals of philosophy, logic, and human rights.
I think we're all right in our own ways.
Maybe you should all marry a Canadian.
>>then after 5 years with socialized benefits you can make the choice between the two.
The question is, also, how can you as individuals act on your opinions. Will voting for the right person even help? Will the 'youth' get a chance to make changes to the system?
One careful part of the economic equation is the savings from UHC mean less dollars in the health care industry which means less health care workers. UHC will reduce insurance sales staff, underwriting, and will impact device/drug companies to some degree (depends on how intro of technology is regulated). Hospital beds will probably shrink to match capacity and shed the corresponding staff.
The interesting part will the ratio of specialists to primary care physicians. We have more specialists than necessary and fewer primary care physicians. UHC will have to change that otherwise the economic goals will not be met. Specialists are more expensive that primary care and the value that they add is not always there.
The coverage and administrative aspects of UHC will dramatically impact the health care industries economically. There is a lot of fluff and low value added activities in health care that should be eliminated. Industry should grow with lower health care costs and absorb the displaced workers. For example an salesman can sell anything.
However, the key to successful economic gains in UHC is that right benefits are covered and the rationing is in place that encourages proper use of health care dollars.
Competition doesn't work in health care but just builds extra capacity since there is no end to demand. That demand will have to channeled carefully to have a positive economic impact.
You have obviously done your research, but as usual it looks better on paper than in real life.
A few points.
I disagree about a "right" to healthcare, but it is illegal for hospitals to turn away a patient in need of care regardless of their financial situation, so there is already a "right". I am happy paying an increased premium to my private healthcare company to cover losses that hospitals take on providing operatinos pro-bono or discounted to people who can't afford emergency care. Hospital visits are expensive for this reason, and I'm fine with that.
Where do people in Canada go when they need emergency healthcare (cancer treatment, transplants, and various other issues)? America because our care is better, faster and worth the money that they pay out of pocket. So essentially they are paying twice, once in their taxes to get put on a waiting list in Canada, the other to pay for good privatized healthcare. Same with Europeans going to India.
As a final note, the government has screwed up social security, and regardless of your political views, they have wasted our tax money on tons of worthless projects (Bridge to nowhere?), do you really trust them to run Universal Healthcare? I believe it's opening pandoras box.
Does the current system need fixing? Yes, but let the market dictate it, not the government.
@zak Adopting a preventive focus is key for sustainability. This is not just changes in the budget but also changes in behavior such as healthier lifestyle behaviors and regular checkups.
@Tim Yes all things related to socialism are not inherently evil. However, Milena does have a point that there needs to be some sort of checks and balances to prevent future pilfering of huge funds. Just because universal access is more humanitarian does not mean that it is exempt from corrupt influences.
@torborn I wouldn't be able to tolerate Canadian winters! We as youth and individuals have the ability to make a different. I think these are the best conditions that we have seen for universal healthcare since the Clinton years. The important thing is have the right approach of both a logical argument and the political capital to pass the legislation.
@Deadhedge Reducing the overhead and administrative costs will be a key source of cost savings. I think the marketing and advertising budgets will also shrink.
@Daniel I'm glad that you are fine paying extra. The problem is that as much as you are paying extra in insurance premiums, that money does not go hospitals. Although they is always money allocated for unpaid emergency care, demand constantly outstrips supply. At least 25% of the hospitals are running in the red.
Americans are not exempt from medical tourism to get procedures and drugs at lower costs. The system is broken, and the market has not moved to fix itself. What suggests to you that they are willing to make changes that favor the consumer?
The number section is quite interesting, but I'm not sure that it should lead to the conclusion that we need government to pay for our healthcare. The fact that the US pays more for healthcare is not enough by itself proof that our healthcare is more expensive then elsewhere. That may in fact be so, but that first point could also just be showing that America has more problems with health then other countries. By fixing that you could start making a dent in the money that would need to be spent.
Your other numbers, like point 2 and the last two, suggest that the government would be able to take care of healthcare more cheaply and with less red tape. When has that ever been the case when any government program is compared with a private one? By nature, government programs have no motivations to run profitably or economically. They have no accountability.
As for why the costs of healthcare is rising, I think a lot of it can be explained by the advances medical technology is continually making. Never before have we had complex drugs like we have now, and never before have we been able to replace organs. All of these require expensive technology to monitor and be made possible. What that means is that costs are bound to rise. That's not convenient for the consumer, but it is keeping people alive.
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